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The COBRA election notice that employers must provide to departing employees can include additional information about enrolling in health coverage through the Affordable Care Act's Marketplaces, or public exchanges, beyond the information already in the Department of Labor's (DOL's)
recently clarified in a set of frequently asked questions (FAQs) that benefit plan administrators are allowed to include within the COBRA election notice extra information about the Marketplaces that goes beyond the model language, which currently consists of the following paragraphs:
The FAQs state that acceptable supplementary information for COBRA notices may include, among other points:
In addition, "COBRA election notices may be tailored to particular groups like young adults aging out of dependent coverage on their parents' health plan," according to one of the FAQs. But "In all cases, they are required to be 'easily understood by the average plan participant' and, therefore, information should not be too lengthy or difficult to understand."
“The guidance explicitly encourages plans to consider ways to help qualified beneficiaries choose the coverage that best meets their needs,” states
an alert from consultancy Xerox HR Services.
Language Isn't Mandatory
"Although use of the DOL's model COBRA notice isn't mandatory, many plans use the model as the basis for their own notices," said Ron Present, partner and health care industry group leader at CPA and consulting firm Brown Smith Wallace in St. Louis. He suggested that health plan administrators "may wish to better inform qualified beneficiaries by including additional health insurance Marketplace details as contemplated by the FAQ."
"The FAQ reiterates that use of the DOL model COBRA election notice will continue to be considered good faith compliance with COBRA election notice requirements," said Rory Akers, ERISA compliance attorney at Lockton Companies, a benefits brokerage and HR services firm in Kansas City, Mo.
"Keep in mind that should employers or their COBRA administrators opt to amend their COBRA notice election forms to include additional information about ACA Marketplace coverage options, they need to ensure the amended election notice meets all COBRA requirements, and is easily understood by the average plan participant," she added.
B. David Joffe, a benefits attorney at Bradley, a Nashville-based law firm, added that "Many employers work with third-party administrators that assist in providing COBRA notices. Those employers may want to check with their providers about adding language about the Marketplace to their COBRA notices. For those employers who provide the COBRA notices directly, they can modify the notices as provided in the FAQ."
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